The present invention relates to a credit card verifier in combination with an encoded credit card to determine unauthorized use of the credit card.
2. Description of the Prior Art
In modern times credit cards have enjoyed widespread popularity and acceptance in a multiplicity of applications. The previously known credit cards typically contained only an account number, customer name, and customer signature strip imprinted thereon.
Due to the growing willingness of retailers and the like to accept credit cards in lieu of cash, credit card theft and the subsequent unauthorized use of the credit card has become a problem of growing magnitude. Although a comparison of the customer's signature with the signature on the previously known signature strip has been intended to detect unauthorized use of the credit card, in practice it has been found that not only are retailers unwilling to carefully compare the customer's signature with the signature on the signature strip, but also credit card thieves have been found to possess an unexpected aptitude in forgery. To date the above mentioned disadvantages of the previously known credit cards have resulted in millions of dollars in stolen merchandise due to the unauthorized use of the credit card.
Other attempts to prevent unauthorized credit card use have proven inadequate. The unavoidable time lag between notification to the credit card company of a credit card theft and the resulting notification to retailers provides ample opportunities for the credit card thief to unlawfully use the credit card. An additional problem in this respect arises in the actual notification to all retailers that a particular credit card has been stolen is not only expensive and time consuming but also it isdifficult to reach all retailers who accept any given credit card. Organized credit card theft rings have further increased this problem by distributing stolen credit cards to geographical areas away from where the credit card was stolen.
Other credit card verification schemes have also proven inadequate in operation. In one type of previously known credit card verification system, the credit card is inserted into a module located at the retailer's place of business. The module in turn is connected to a central data processor which compares the credit card number to determine if the credit card is stolen. This type of credit card verification system suffers two major disadvantages. First, the verification system is unduly expensive, both in equipment and computer time, so that only major retailers are capable of absorbing the cost of the system. Secondly, this previously known verification scheme is totally ineffective between the time of the credit card theft and the notification to the credit card company of the theft. Therefore, thousands of dollars of unlawful credit card purchases may be incurred before the central processor is programmed to reject a particular credit card.
Other attempts at detecting forged or altered credit cards have involved placing magnetic codes, strips, or the like on the credit card. The disadvantage of the previously known magnetically encoded cards and the like are that the codes are easily deciphered so that professional credit card thieves can easily either alter the credit card or alternatively manufacture forged credit cards. Such magnetically encoded cards suffer the further disadvantage in that the manufacture of such cards is very expensive and also requires relatively expensive machinery. Moreover, no adequate method has been devised to magnetically encode existing credit cards; rather the entire credit card must be remanufactured with the desired magnetic coding. The cost of manufacturing large quantities of new, magnetically encoded, cards is necessarily prohibitive.